A Chinese consortium is the front-runner to buy Glencore Xstrata PLC's Las Bambas copper mine in Peru for $5 billion or more, according to people familiar with the matter, setting up a takeover that would be one of the largest foreign acquisitions ever by a Chinese company.

A group comprised of affiliates of state-controlled outfits China Minmetals Corp., Citic Group Corp. and Guoxin Group is the only bidder left in an auction that Glencore Xstrata agreed to run to win China's approval for the merger that gave rise to its...